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Sony Ericsson turns in a...profit

Sells less, makes more

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Sony Ericsson is celebrating a first quarter which saw the company making money, despite selling almost a third fewer handset than this time last year.

Sony Ericsson was expected to lose money this quarter: a Reuters poll of analysts averaged the expected loss at €157m.

But the company has rather surprised the market by turning in an €18m pre-tax profit based on selling fewer, but higher value, handsets with much better margins.

That €18m profit compares to a €370m loss during on the same period in 2009. Sony Ericsson only shifted 10.5m handsets, compared to 14.5m in the first three months of 2009, but not only were those handsets worth more (€134 compared to €120) but the company's margins shot up from eight per cent to 30.

Even the gross sales figures have dropped by over €300m to €1.4bn, but those sales are now high-end handsets with bigger margins and greater customer loyalty, with the company citing its focus on high-end handsets and better interfaces as the driving force behind its success. ®